SAUDI ARABIA Law and Practice Contributed by: Dana Halwani and Leanne Farsi, Derayah LLPC
the reporting requirement; for example, the formation of an unincorporated joint venture or a consortium may also be sufficient. Special rules apply to mergers and acquisitions involv - ing listed companies, which are set out in the Merger and Acquisitions Regulations (Resolution of the Board of the Capital Market Authority No 1-50-2007 of 21 Ramadan 1428 Hejra corresponding to 3 October 2007), as amended by Resolution No 3-45-2018 of 7 Sha’ban 1439 Hejra corresponding to 23 April 2018. 6.2 Merger Control Procedure Under the 2019 Competition Regulation and its Imple - menting Rules, the parties to an economic concentra - tion exceeding the threshold must submit a report for GAC approval at least 90 days before the comple - tion of the action. This report is submitted through the GAC’s website and must contain the following information: • the basic information concerning the operation of the economic concentration and the parties thereto; • the sectors and markets concerned; • the likely effect of the economic concentration on competition generally; • the most prominent customers; and • the most prominent competitors. The report must also contain any other data the GAC requires to review the economic concentration. Certain documents must also be submitted to the GAC in connection with the buyer and target entities, namely: • their articles of association; • their commercial registration certificate or an equivalent document; and • their financial statements for the past two years. Once the report and required documents are received, the GAC may publish basic information on the eco - nomic concentration and request comments from the public. The GAC must evaluate the application in light of the following factors:
• the structure and level of competition in the market in Saudi Arabia, and abroad in situations where the competition has an impact on the Saudi market; • the financial positions of the parties to the eco - nomic concentration; • the availability and accessibility of alternative com - modities; • the distinctness of the commodities; • consumer interests and welfare; • the probable effect of the economic concentra - tion on prices, quality, diversification, innovation or development in the market; • advantages and disadvantages to competition aris - ing from the economic concentration; • the growth and direction of supply and demand in the market; • the barriers to entry and exit or the expansion of enterprises in the market, including regulatory bar - riers; • the likelihood that the economic concentration will create or enhance influential market strength or the dominant position of the enterprise in any particu - lar markets; • the degree and history of practices prejudicial to competition in the relevant market; and • the views of the public, the parties related to the economic concentration, and the sector regulators. At the conclusion of the enquiry, the GAC may approve or reject the application, or may set conditions for its approval. If no ruling is made within 90 days of sub - mission of the application, the application is deemed to be approved. 6.3 Cartels Article 5 of the 2019 Competition Regulation prohibits practices that have the effect or intention of disturb - ing competition. Such practices can involve express or implied agreements between businesses, but a single entity can also be guilty of engaging in anti- competitive practices. Article 5 sets out a non-exclusive list of practices that are considered anti-competitive, as follows: • fixing or proposing prices for goods, consideration for services, conditions of sale or purchase, and the like;
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